i. Indemnity Insurance: Generally, insurance is a contract of indemnity, except for life insurance and personal accident insurance. Under a contract of indemnity, the underlying principle is that the insured shall be returned to the same position he was in immediately before the happening of the event insured against.

ii. Contingency Insurance: This concerns life and personal accident insurance in which the insurer’s liability is dependent on human life. The amount of the indemnity becomes payable on the happening of the contingent event insured against. The sum payable is not based on the loss suffered but the amount stated in the policy.